posted 9.15 a.m. est
Pre-open Monday 4th January
The First Level Resistance at 1123 given on Wednesday was probed on Thursday. In fact, Significant Sellers Responded at 1124 (red-at-top) and that was the day session high. Sellers were active again later in the day (red-at-bottom) and although this wasn’t Effective Selling (the Value Area was overlapping) this was the first time I had marked Significant Selling activity for nineteen days. The imbalances could be due to end-of-year squaring up before the long weekend but if the Sellers are taking control we will see them appear on the profile again soon.
Thursday’s low probed down into the high of the previous range (1113) but not below 1108 which is the current poc of any major significance. With major charts printing very close to important levels (see below) I need clear signs of directional conviction from either the Significant Buyers or Sellers before committing at the start of this year.
Longframe: The SP500 index closed at 1115 on Thursday which is back below the maj1/2 level (1121) and the Nyse comp has yet to close above its maj1/2 (7284.5). These are the most important charts in the longer timeframe.
Sign of strength: If the market is setting up for another bull leg both these charts will most likely consolidate above those levels first and we’ll mark Effective Buying above ES 1108.
Sign of weakness: Both charts will continue to find resistance at the maj1/2 levels and we’ll see Effective Selling below ES 1108.
